In his first year as a music student at Cambridge University, Robert Kirby sought to join Footlights, the undergraduates' fabled arts and drama club. He was turned down, but the events of that day had a momentous impact on his life. Among others who auditioned unsuccessfully was a deeply sensitive would-be singer-songwriter called Nick Drake. The affable and ebullient Kirby and the painfully shy Drake seemed polar opposites, yet they formed an immediate and intuitive bond. Drake asked Kirby to arrange his songs, and Kirby went on to play a key role on two Drake albums and in his resultant enduring status as a cult icon.

Kirby, who has died following emergency heart surgery, aged 61, would appear on more than 100 albums and work as an orchestrator and arranger for Paul Weller, Elton John, Elvis Costello, Nick Lowe, Steve Ashley, Ralph McTell, the Strawbs and Magic Numbers, among others, but he was always indelibly linked with Drake. "Everything always goes back to Nick Drake," he said. "Meeting Nick made my career."

Kirby was born into a working-class family in Hertfordshire, won a scholarship to Bishop's Stortford college and went to Caius College, Cambridge, intending to become a music teacher. His first love was folk music and in his mid-teens he toured Germany with a folk group playing Bob Dylan covers. But it was George Martin's work with the Beatles – notably on Eleanor Rigby and She's Leaving Home – which inspired Kirby to want to arrange music rather than be a frontman. "My favourite musician is Mozart," he said, "but the Beatles run him a close second."

When his tutor at Cambridge told him his compositions sounded like cornflakes commercials, he took it as a great compliment. "That good?" he said. At Cambridge he formed a string octet, appearing for the first time with Drake at the Caius May Ball and playing three songs with him – Way to Blue, The Thoughts of Mary Jane and Day Is Done – that later appeared on Drake's debut album, Five Leaves Left (1969).

Drake dropped out of Cambridge at the end of his second year in 1968 after being discovered by the producer Joe Boyd, who quickly booked him into a studio and recruited his own arranger, Richard Hewson, to work on the record. The wilful Drake disliked what Hewson had done and insisted that his old college friend Kirby would do a better job. Despite having never set foot in a recording studio before, Kirby also quit Cambridge to throw in his lot with Drake, a man he regarded as "the best lyric writer to come out of England". He wrote the delicate string arrangements that characterise Five Leaves Left – though Harry Robinson was brought in to arrange River Man because the inexperienced Kirby could not then write in 5:4 time.

They remained close friends and collaborators. Drake would record a song with guitar on a tape recorder, vaguely suggesting an oboe or violin part, and Kirby would then sit down with him, deciphering his complex guitar tunings, meticulously notating every chord. Himself adept on guitar, piano and various brass instruments, Kirby painstakingly wrote out his arrangements on manuscripts, believing the limits of his instrumental competence would stifle his imagination if he tried to compose on an instrument. A man who eschewed computer tech-nology, he employed the same method for the rest of his career, despite the tension it invariably created in the studio as the musicians gathered and he waited to hear for the first time whether or not they would replicate the sounds in his head.

Drake craved a more commercial direction for his second LP Bryter Layter (1970) and Kirby's intricate work on it was partly inspired by the Beach Boys' Pet Sounds. But this and the third LP, Pink Moon (1972), sold poorly and it hit Kirby hard when a disillusioned Drake died suddenly in 1974, aged 26, after an overdose of an antidepressant drug.

However, Kirby went on to work on albums with Sandy Denny, McTell, Tim Hart and Maddy Prior, Richard and Linda Thompson and – most closely – the Strawbs, who, finding themselves in need of a keyboard player following Rick Wakeman's departure to join Yes, invited him on the road with them. It was a rewarding period but, returning from a long US tour in 1979, he found the wind had changed and, with the advent of punk and disco, there was little demand for sophisticated string arrangements.

In December 1979, he married and abandoned the insecurity of a musical career to take a "proper job" in market research, rising to become a director of Ipsos. He continued to write arrange-ments for selected projects such as Costello's 1982 album Almost Blue, the London Symphony Orchestra's Screen Classics Vol 7 (1994) and Weller's Heliocentric (2000).

All the while, Drake's posthumous reputation grew, and Kirby was delighted as new generations discovered the music of his old friend. He remained loyal to Drake's memory, often debunking the myths of an impressionable, permanently depressed romantic that had arisen around him, taking great delight in telling joyous stories of their happy, drunken nights together in the pub. "Everybody at the time had long hair, was angst-ridden and read French impressionist poets. He wasn't that abnormal," he said.

As Drake's celebrity grew, another obscure record Kirby had worked on in 1970 – Just Another Diamond Day by Vashti Bunyan – belatedly won attention through use in a TV advertisement, and the spotlight shone back on Kirby. He reconnected with some of those he had worked with previously, but was also increasingly sought out by young bands who felt empathy with Drake, notably the Magic Numbers, for whom he came to be as much a mentor as an arranger.

Kirby retired from market research to concentrate again on music, achieving a career highlight by writing a new arrangement of the Beatles' She's Leaving Home for the Magic Numbers to cover on a 40th anniversary remake of Sgt Pepper's Lonely Hearts Club Band. In May this year he was again writing new arrangements of Drake songs for a tribute concert in Birmingham. His marriage ended in divorce last year but, ever gregarious and full of ideas, he planned a move from London to East Anglia and was looking forward to new commissions and indulging his long-held passion for cider brewing.

He is survived by his daughter Constance and son Henry.

•Robert Bruce Kirby, musical arranger and orchestrator, born 16 April 1948; died 3 October 2009